U.S. sanctions take toll on the ill in Iran as medicine becomes scarce

The first wave of U.S. sanctions against Iran was looming when doctors gave Aram Rawanshad the bad news.

It was early June when she learned she was suffering from endometriosis, a painful disease that occurs when tissue grows outside the uterus. It was too late for surgery, and doctors warned her to act fast before the disease spread.

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Rawanshad, a 42-year-old writer from Karaj, Iran, was given a prescription and urged to stock up before supplies ran out.

She refused.

“I told the pharmacist that if I buy more than one month’s supply, other patients would be deprived,” she said.

Though it was a kind gesture, it came at a cost. The following month, when she returned to the pharmacy, the medicine was sold out.

Skyrocketing inflation, a shortage of raw materials and fewer imports have made medications in Iran both scarce and costly.

Although humanitarian goods, such as medicine and food, are exempt from U.S. sanctions, severe restrictions on Iran’s financial institutions have forced the outside world to reconsider doing business with the Islamic Republic.

Experts fear the latest round of sanctions will make the situation even worse.

A month after the U.S. Treasury leveled sanctions against 20 Iranian financial institutions, the Trump administration reimposed sanctions against Iran’s energy, banking and shipping industries.

Whereas previous administrations that slapped sanctions on Iran made it a point to encourage companies to continue humanitarian trade, the Trump administration has not.

“Companies that are looking at potential customers will feel like it’s a huge headache to sell to Iran,” said Elizabeth Rosenberg, a senior fellow at the Center for New American Security and the former senior sanctions advisor at the U.S. Treasury.

Although Iran’s Health Ministry provided domestic manufacturers with foreign currency at subsidized rates, the soaring costs of raw materials such as cardboard, aluminum and lactose, which is used to sweeten pills, have increased the price of domestic medicine by nearly 50%, according to Siavash Saadat, a 65-year-old manager of a pharmaceutical company in Tehran.

Analysts and Iranian pharmaceutical companies worry that patients with cancer and other serious diseases, such as Rawanshad, are most at risk.

After searching Tehran for medicine, Rawanshad finally found a pharmacy that had it in stock. She bought three months’ supply, but anticipates she’ll have to turn to the black market in the future.

“Dealers and middle men are buying [medicines] and hoarding them. This also increases the prices,” she said. “People are at the mercy of dealers in the black market who are profiting from the scarcity of imported medicine.”

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Iranian authorities, eager to reassure frustrated citizens, have denounced the U.S. sanctions, calling them illegal and vowing that they will survive the economic crisis.

Secretary of State Michael R. Pompeo said U.S. sanctions are meant to force the Iranian government to “abandon its destructive activities,” adding that the sanctions will target the government, not Iranian people.

But the reality is far more complex.

After years of fiscal mismanagement and corruption, global banks have been hesitant to do business with Iran’s financial institutions. Even when the Obama administration lifted the sanctions against two dozen Iranian banks as part of the landmark nuclear accord, it made little difference.

One of the bright spots had been Parsian Bank — a reputable private-sector bank that has been a vital conduit for European companies to conduct humanitarian trade with Iran. But it too was swept up in the new round of sanctions.

The U.S. Treasury said it hit Parsian Bank with the sanctions not because of any illicit activity but because of a firm that used its investments from Parsian Bank to provide money to Iran’s Revolutionary Guard Corps.

Richard Nephew, senior research professor at Columbia University’s Center on Global Energy Policy, said companies will see the restrictions against Parsian Bank as a warning to break off trade with Iran.

“The Trump administration is going after everyone at all levels of the food chain. It’ll scare people you may not wish to scare, like humanitarian businesspeople,” Nephew said.

Brian Hook, U.S. special representative for Iran, said it falls on Tehran to make other countries and foreign institutions feel comfortable dealing with the Islamic Republic.

“The burden is not on the United States to identify safe channels. The burden is on the Iranian regime to create a financial system that complies with international banking standards to facilitate the sale and provision of humanitarian goods and assistance,” Hook said.

Meanwhile, some of Iran’s poorest and most vulnerable are bracing for what’s next.

The price of most commodities in Iran — not just medicine — has increased after years of economic mismanagement, skyrocketing inflation and the collapse of Iran’s currency, which has lost more than half its value since the start of 2018, according to Steve Hanke, professor of applied economics at Johns Hopkins University.

Hanke estimates that Iran’s annual inflation rate is around 270%, compared with 13% in January before President Trump pulled out of the nuclear deal and began hitting Iran with severe sanctions.

Sepideh Saadat, a pharmacist in Tehran, is in charge of buying medicine for her grandmother, who suffers from Parkinson's and Alzheimer's diseases.

In the coming months she anticipates that she’ll have no other option but to buy it on the black market.

“Dealers in the black market are anticipating further devaluation of the rial and so they are buying medicine from Turkey and selling it sometimes for 10 times the cost,” she said. “Those who cannot afford it are doomed to die painfully.”

Experts say the next six months will be telling about whether Iranian authorities are able to withstand the latest round of sanctions.

“Will Iran be able to evade sanctions and is the Trump administration going to impose new ones?” Nephew said. “Those are the things we don’t have an answer to.”

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